Tharisa outperforms adjusted 2020 guidance, says rhodium exposure will help growth

Phoevos Pouroulis, CEO, Tharisa

THARISA brought its 2020 financial year to a strong close, the constraints of the Covid-19 pandemic in the third and final quarters notwithstanding.

Platinum group metal (PGM) production for the three months ended September totalled 40,500 ounces 6E, taking full-year output to 142,000 oz which is more than the 130,000 to 135,000 oz for PGM adjusted guidance.

Chrome production was 371,000 tons for the quarter taking full-year production to 1.35 million tons which is another beat of adjusted guidance of 1.25 to 1.30 million tons (Mt). Tharisa has guided to production in the current 2021 financial year of 1.45Mt to 1.55Mt chrome concentrates, and 155,000 to 165,000 oz of PGMs.

In terms of top line revenue, Tharisa’s realised chrome price was $140/t while its contained metal basket price totalled $1,951/oz.

In notes to the fourth quarter production report published on Thursday, Tharisa CEO, Phoevos Pouroulis alluded to the high rhodium and palladium received prices which were likely to be feature of the firm’s year-end report.

The spot price for rhodium hit in excess of $13,000/oz, a record level. It and the palladium price “… ensures Tharisa has an excellent financial and operating platform to progress the business through its next phase of growth,” he said.

The build of the Vulcan smelter had restarted following interruptions caused by Covid-19 related lockdowns. The facility – which will take chrome production to two million tons (it was originally conceived to achieve this level in 2020) – will be completed in 12 months.

“Revised capital expenditure has not been provided, but we would expect the project to be broadly in line with previous guidance ($54m), helped by rand devaluation to offset higher local costs,” said Berenberg in a note on Tharisa’s fourth quarter. The impact of the Vulcan project would be most likely felt in the 2022 financial year, it added.

Shares in Tharisa responded favourably, rising 14% this week.

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